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tv   Trending Business  Bloomberg  October 4, 2015 9:00pm-11:01pm EDT

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rishaad: it's monday, october 5. i'm rishaad salamat. this is "trending business." here's a look at what we're watching this morning. positive thinking. asia starts a new week in the green. u.s. jobs numbers reduced the chance of a rate rise this year. some are looking to next year. schools remaining closed in malaysia as air quality worsens around kuala lumpur. india says it may be years
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before a solution is found. pleading mea culpa and for public trust. the chairman says the emissions scandal may put the company's survival at risk. follow me on twitter. that's my handle. starting this new week on a positive note. report will mean that a rate rise is not as eminent as it was. we are watching the markets. here is juliettete. juliette: it certainly is a positive start to the trading week. we saw australia lift the region. some strong gains coming through in mining stocks. it is a public holiday in some states. we are seeing a very solid session in australia. looking at the markets, singapore, taiwan, and malaysia also joining in the buying. we are seeing a good pickup in
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korea as well. up by 1.4%. i want to show you some of the big moves we are seeing. this is the asia-pacific region. every sector in the black. oil, gas, and mining stocks leading the charge. new crest mining, the best performer on the regional benchmark. in australia, up by more than 10%. upgraderio, rio had an from societe generale. huma petro is doing well in korea. kia motors is the biggest drag on the index, down by almost 1%. that is the biggest fall. it generally seems very positive today. hong kong coming on at the bottom of the hour. we will be watching retail. remaining closed until thursday. rishaad: negotiators working on the tpp or transpacific
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partnership, these discussions have been extended again in the hope that we can get a deal soon. we expect to hear from those involved later. look at what the stumbling blocks may be. yvonne: another marathon negotiating session. what was supposed to be two days of negotiations have extended to a fifth day. news reporting ministers may continue talks in two hours. dairy and drugs remain the big obstacles in this deal. the u.s. and australia may have come to terms with intellectual property protection for biological drugs. u.s. companies have been fighting for exclusive data rights for next generation medicines. they already cut patent laws to eight years. australia,e malaysia, peru, and chile say
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these time frames are still too long. there have been talks of a five-year timeframe, three of which are safety monitoring. the details still unclear. seems to be some compromise has been reached. discussions making it harder to resolve other issues. the last obstacle is dairy. sources tell us the u.s. and new zealand remain at odds. wellington once greater market access. washington says it won't open its own agriculture sector until they get some assurance that american producers can sell more in canada, where 90% of the dairy market is still closed to foreign products. 12 nations still negotiating this morning. rishaad: we will have a more detailed look at that through the course of the show. we want your opinion. do tweet us your thoughts. we're going to look at macau. it does seem to be getting a bit of a shot in the arm. mainland tourist arrivals
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significantly higher than a year ago. stephen has been breaking down the numbers. stephen: the bad news has been at the gaming tables. the good news is coming at the beginning of this golden week holiday in china. mainland chinese visitor arrivals rising 21.6% in the first couple days of the ongoing week-long holiday. up 6.4% if you count the third day of the holiday. gaming revenue fell by 33% in september from a year ago. that was the 16th consecutive month of decline. junket operators really, the cost of the slowdown. fewer junkets bringing in the high rollers. the slowdown in china, the corruption crackdown taking their toll. quoting the director of china's liaison office, the government will introduce support measures by the end of this year. that led to a sharp rally friday
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in gaming stocks in the u.s. and hong kong. wynn surging 23% in new york. wynn macau shares traded in hong kong. they are down due to that gaming slump in macau. let's change to the land of smiles. thailand has big hopes for chinese visitors this golden week holiday. more than 6 million chinese are expected to visit this year, more than double the 2012 figure. anecdotal evidence from over the --kend from resort operators i caught up with him yesterday. he suggests not as many chinese are visiting as hoped. >> thailand is having quite a tough period this year. the tourists that are here are chinese, but they're not in the numbers you would expect. i guess they're concerned about
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their own economy. stephen: the slowing chinese economy and the bangkok bombing hurting sentiment of chinese vacationers to thailand. rishaad: thanks for that. let's have a look in terms of stories making headlines now. a high-profile stock market link between shenzhen and hong kong may be delayed until next year. 10 of 13 analysts surveyed by bloomberg expect china to focus on stabilizing its stock market rout before introducing new mechanisms. new data from the hong kong stock exchange's shows northbound and southbound trading on the shanghai-hong kong stock connect fell to the lowest level since february. the stock link allows mainland investors to buy hong kong stocks and permits more foreign access. a group led by hong kong's richest man has agreed to buy a portuguese windfarm developer in a deal worth as much as $324
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million. li ka-shing's power asset holdings and cheung kong infrastructure holdings will each own half of that venture. the deal is subject to regulatory approval but if it goes through, it will give li 20% of portugal's wind power market. the company is saying the venture allows them to expand their existing renewable energy platforms globally. the vw chairman has warned that the diesel external -- diesel scandal could threaten the company's futures. engineers have admitted installing cheating software in vw'ses in 2008, citing internal investigation. they say vw manipulated stop where -- manipulated software. than $7et aside more
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billion for recalls and repairs. that is not thought to include provisions for legal fees and fines. rishaad: another story we're following, taking on hong kong's best-performing property stock. do check it out at coming up, nearing a deal. can negotiators bring seven years of talks to an end today? we are looking at the tpp discussions later on. after the short break, asia-pacific equities on the way up. the fed doesn't look like it's going to hike this year. more "trending business" in a couple minutes. ♪
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disappointing u.s. jobs numbers further lower the odds of the fed increasing the cost of borrowing this year. employers adding 142,000
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positions in september, below the economists' thinking. su keenan has a look at that and other events to watch this week. su: lowly ahead on wall street will see u.s. ambassadors continue to focus on economic data as a whole new round of companies release their results. among the economic reports, the economists surveyed by bloomberg are forecasting the u.s. service industries probably grew at a slower pace in september. that follows the second highest reading since 2005. we are likely to see a widening in the u.s. trade deficit as august results are forecast to show sales overseas weekend and imports picked up. the imf will be releasing its world economic outlook midweek. thursday, the u.s. federal reserve publishes the minutes of the september 16-17 meeting. this will give everyone a clue
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as to what policymakers were thinking when they left of the fed benchmark rate unchanged, a decision some say is indicated by weaker than forecasted jobs data. monsanto will be out with their latest numbers. in new york, su keenan. rishaad: we're going to check back on the markets. sean darby, great to see you again. the good, the bad, and the ugly when it comes to this part of the world is part of the research you put out. sean: there's such an accumulation of dollar debt and local debt, that as we've seen over the last two or so months, as expectations rose about fed rates going up, this has tightened liquidity. paradoxically, friday's weak employment data might be reasonably good. rishaad: when good news is bad news, etc. it's a weird way of looking at the world. angie: --
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sean: what really matters is the real value of the dollar. it has been appreciating dramatically. i think that rate of change is starting to roll over. that dollar liquidity will be going back into financial assets. yieldsould mean that start playing out in emerging markets after evaporating for a good six months. rishaad: who and where? we've seen the indonesian rupiah mashed, as has the ringgit as well. sean: a lot of these small currencies that have been heavily shorted, which saw large outflows, indonesia, malaysia, , those actually should see quite a rebound. on financial assets, it actually should be quite good in the last quarter of this year. rishaad: what about developed economies in this part of the
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world? japan. you've got a couple things out. bento boxes, socket, and? sean: the irony is that the macro data in japan is not fitting with the micro data. we've seen q2 profits in japan up over 20%. jobs advertised in japan up year on year. we're seeing that japan, just like germany, is starting to benefit from tighter labor markets in the corporate sector. that's showing up in the bottom line, not necessarily in the top line macro data. rishaad: many of these japanese companies are multinational. they are doing well around the world, not necessarily in japan. sean: part of that is true. i think the corporate sector in japan has not had the problems that a lot of companies in korea and taiwan and the states have had. margin, that improvement in real incomes in japan, is
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starting to allow the domestic consumption story 2 -- rishaad: it's got to feed into the macro data. sean: everyone is starting to think about a q3 recession in japan. i think we might get a big surprise in consumption in the august data. year-ending into the japan starts to signal that there is some rebalancing. rishaad: as you put it in the paper, the facts don't fit. sean: unfortunately, i don't want to say because my job is influenced by macro data, but in a sense, closing your eyes in japan has done you a world of good. the micro data has suggested a much better profile of underlying growth. i think that's still going to continue. rishaad: hasn't translated, the macroeconomic data, to the stock market. sean: unfortunately, japan has wed over the last
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quarter, particularly in this part of the world. i think that's pretty harsh. japan stacks up well in all the metrics, particularly the boost from lower commodity prices and potentially some stimulus measures in japan. rishaad: where else are you looking? sean: i still think europe is not doing too badly. germany is very similar to japan, a tight labor market, consumption data, irrespective of the problems happening in the auto sector, underlying, germany is showing pretty reasonable growth. i think that's going to surprise. rishaad: what about u.s. equities? we've done all right, haven't we? sean: unfortunately for the u.s., it's a very narrow set of companies that are benefiting. some of the construction numbers
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have been quite good. the multinationals have suffered in this type of environment. maybe there's a little bit of relief from the dollar weakening. overall, i think it's still range trading for u.s. equities. there's still too much on the high valuation side for me. rishaad: it's also this sort of dichotomy between the equity market and fixed income markets. who do you believe when it comes to the macro picture? i didn't want to talk about interest rates, but i've got to. sean: i think the way to look at it is where real bond yields and credit spreads have been trading in the last quarter. unfortunately, they've been quite adverse for u.s. equities. spreads have widened on the back of the energy credit cycle and real bond yields have been above 2%, making bonds a much more favored asset allocation. i think that's still going to be
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the case. it's going to be a difficult market for u.s. equities given the fact that real bond yields are reasonably favorable. rishaad: what is being priced into chinese equities now? when i say, let's look at h-shares for instance. angie: -- sean: the dilemma has been how much of a depreciation in the yuan is being priced in. the cmy and cnh converged for the first time since august. i think that's showing that the authorities have control over the fx rates once again. that means that we are probably almost there at the moment. i think we are getting the data points where there's been relaxation of auto financing, some of the property measures have been relaxed, and that should start to filter through to the macro data.
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it's not going to be a big liftoff, but i think some of the worst may be behind us. rishaad: thank you indeed, sean darby. let's have a look at some of the stories making headlines around the world. benjamin netanyahu vowing what he calls a harsh offensive in response to separate attacks that killed four israelis. he instructed security forces to accelerate demolition of homes and use detention without trial more widely. police have restricted access to jerusalem's old city. bashar al-assad says the middle east will be destroyed if the russian air campaign in its country fails. moscow attacks on the so-called islamic state have been criticized by the west. in his first interview since the russian intervention, assad conceded that his army has had to abandon parts of northern syria to defend areas more crucial to damascus. kia refused to join
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the campaign calling for sepp blatter's immediate exit. mcdonald's and visa demanded his removal on friday. id does and kia have remained loyal. adidas called for reform without mentioning blatter. blatter is defiant in the face of investigation. up next, let's have a look here. there.o clear skies out the outlook for singapore, indonesia, and malaysia remains weak for the foreseeable future. pictures from kuala lumpur there. details when "trending business" returns. ♪
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withad: you're back "trending business." the hayes blanketing much of southeast asia will keep malaysian schools closed. air quality levels deemed very unhealthy. let's get over to have haslinda amin. is there any improvement on the horizon? haslinda: not at this point in time. here we are, still talking about -- the government says
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you can expect the haze to continue to persist through november. people still struggling with the thick haze, in malaysia, the air quality is close to hazardous levels. schools are shut for the next two days, except those in outlying areas. we're looking at live pictures. more activities have been canceled, like a marathon involving 30,000 people. by the way, three airports in malaysia were forced to close over the weekend because of thehaze, not surprising that it is causing a lot of tension. we are talking about singapore, malaysia, large parts of malaysia, all of singapore shrouded in hayes. streets wearing masks. to cancely, we had the finals of the first day of the swimming world cup.
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as if it's not bad enough, the philippines have seen the hayes for about a week now. rishaad: this has been going on for years. you've lived there for years. is this the worst it's ever been, in your opinion? haslinda: it is. not just years, more than a decade. it is the worst haze seen on record. nearly 1000 hotspots. most of the fires on peatlands. now, they're estimating the cost will exceed $9 billion. rishaad: thanks, has. after the break, we're asking about china's roller coaster market. ♪
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rishaad: disappointing u.s. payrolls launching a new week with a bang. four-day game since 2011. all of this on the prospects of weak economic data pushing back. with theons transpacific partnership talks have extended with the hopes that a deal can be reached. -- japanese change minister
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the japanese trade minister says a deal could be agreed in principle as soon as today but issues remain including gary. it could threaten the company's very existence. speaking as vw took out ads in newspapers. several engineers have admitted installing cheating software in engines in 2008 and they pointed to vw's internal investigation. the china a look at open. here is juliet. uliet: we saw that big pickup in casino stocks on ride a. anotherntertainment up 7.8% in early trading. that is the biggest two-day gain since 2011.
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in fact, every stock on the hang seng index except for 2 are writing today. retailers are looking very good despite that -- those retail numbers. dairy stocks in focus today. china dairy up. here is the picture on the hang seng index at the moment. the overall index up by 2.1%. of course, china will be closed until thursday. joining in that rally that we have seen across the asian region today. hike a littlete bit less likely. we are seeing asian stocks rise. pickup seen a big
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particularly in mining shares in australia. they're one of the best performers of the regional benchmark index. below average trading in australia due to a public holiday in new south wales. elsewhere, great gains in the region. rishaad: let's get back to that top story. negotiators working on a transitive partnership or cpp, extending their dashboard tpp, extending their discussions. yvonne is having a look. what is the deal? yvonne: it seems like they were getting the finishing touches done, they were going to have this press conference hours ago, but now they are saying they are going to resume talks again in about 90 minutes. they had no reason, no public comment, for this delay. we may not be hearing from any of these officials today. the marathon session continues. rishaad: it has been going on
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for years. yvonne: now it is five days in atlanta. the big issue they didn't come to terms with over the weekend was the biologic drugs, the new age generation drugs. between the u.s. and australia in particular, this is about data exclusivity. theyyou develop a drug, have these exclusive rights for about eight years. they usually had it for 12 but they cut that down recently. australia, malaysia, peru, chile, said it is just too long because the information can be released and used to produce less costly generics. to pay forey have rsd, that is the point here, isn't it? yvonne: it is about innovation for u.s. manufacturers as well. they did have a compromise on a five-year timeframe. rishaad: tell me about dairy.
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yvonne: that seems to be the remaining sticking issue. big hurdle, because the u.s. and new zealand still are at odds about how less access they can get into -- about how much access they can get into the u.s. daily market. the u.s. saying, we are not going to be opening our own agriculture sector and lest we get some assurance that canada and mexico will open their doors as well. as we know, 90% of the canadian dairy market is still closed to foreign producers. rishaad: saudi arabia cutting oil prices to asia and the u.s.. $3.20 -- training and a $2.30 discount. other opec members have raised production to counter shares. trading at the moment is just a whisker above $48.
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the discount to the u.s. is narrow and aramco has raised prices. britain's biggest insurer is down playing a move to asia. the sunday times reported that credential was weighing up eu or singapore. prudential said only 1/5 of its operations would be affected. rules in january require all eu insurers to beef up capital. tokyo's airport. american won the rights to delta's old slot. they were handed back because american has failed to file schedules or offered tickets. only four slots. let's have a look at what has
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been going on with these stocks in china. turbulent, of course. election to depression. where do we go from here? bloomberg intelligence's tim cratered is here. tim: what a difference for months makes. if you think about where we have gone, china on an absolute and relative basis was one of the most expensive markets, highest valuation markets i should say, around the world. we are now dropping towards, as , the graphics there are the market from a forward pe basis, we have now pulled back to where we are below 12 times forward earnings. you can judge whether that is cheap or expensive, but it is a lot lower than it was. it is actually right around the long-term average that we have
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seen, actually a little below. from that perspective, it is quite notable. you can compare this versus other asian markets on this chart to get some context, from very high to pretty low outside of, say, hong kong. rishaad: you can look in this and look at the highs and lows, but is there anything that really stands out to you? tim: the diversions or dislocation between large and all caps is still striking -- large and small cap is still striking to us. the july 8 point of reference, ,here the big plummet stopped when china came in with state support mechanisms and were really focused on the large cap stocks. the first decile of the shanghai composite down 9%. 13 times forward earnings on a medium basis.
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look at the small cap, 10 decile. rishaad: tell me what a decile is. tim: 10%. at 33% forward earnings. this is counterintuitive. you would think that with state support the larger caps would have outperformed and they happened. there are many sectors that are now trading below world benchmarks. what other approaches are there when you want to look at valuation? tim: a couple of standouts for us. what is taking those multiples and comparing them to grow. on ah expectations bottom-up basis are still quite high for chinese companies. p/e to growth, you actually have china looking more interesting. another way to look at this is on this chart.
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the market cap to relative gdp. we have this huge spike in we have pulled back below the long-term average at about .5 times forward earnings. this compares that same graphic to the world and the u.s. current trend. we're back to long-term average. we have very high to more normal. rishaad: i want you to change your hand and put your gaming hand on. visitors, they are returning? two things that happened with these stocks the past two days. number one, there was an announcement that there might be some further relaxation of visa restrictions and actual expansion of methods of boosting tourism. secondly, we have had the golden week and there has been a nice uptick in visitation.
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rishaad: are they going to the tables? tim: i can't imagine that they are not. if you go back to thursday, we had september numbers for revenue, exactly what you expect from a seasonal perspective. what we have written on thursday is that we think it could mark bottom in revenue. we don't october is going to be better because of the holiday. you also have come at the end of the month, studio city that's open up, further movements in terms of potential relaxation. we are moving from a construction zone to a resort destination and it is a big shift. rishaad: the comparisons are getting better, aren't they? tim: the comparisons are easier, the dynamic is easier. non-gamingnew,
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attractions, for example studio city, which hopefully create more of a buzz. chinese are still traveling but they just haven't had a reason to go to macau for a wild and now there is new stuff. rishaad: thank you, indeed. we will keep the theme on the chinese markets and see how the turmoil is being felt further abroad. the philippine billionaire henrique red zone remaining upbeat. the country's biggest private casino operator is sexy losses narrow because gaming revenue is in -- is set to see losses narrow because gaming revenue is improving. the picture should start narrowing in the next few quarters. industry has been painted with the same brush.
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but we are nowhere near the situation in macau. billionaire henrique razon speaking exclusively to bloomberg. seven cite out on wednesday with profit growth year on year for the first time since early 2014. galaxy phones have lost shares to the iphone. abbe shaking up his cabinet wednesday. his controversial security legislation. fuji says the son of a former leader may win a place. if so, he would be japan's youngest ever minister. japan's richest man has said his business has seen no adverse impact of the slowdown in china. he is sticking to his plans to open 100 uniqlo stores on the
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mainland. retailing reports on thursday. saturday, the 70th anniversary of the founding of the workers party. kim jong-un has ordered the biggest ever parade to mark the occasion. perhaps a long-range missile test. up next, it is a hard sell. the transpacific partnership negotiations nearing their home stretch but significant stumbling blocks remain. the latest from those discussions. ♪
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rishaad: there is a look at some of the stories making headlines around the world. with flash floods killing at least 16 people and leaving
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three missing in the south of france, rails service remains shut down along the south riviera. freak weather dumping almost 20 centimeters of rain in cannes saturday night. the town has seen more than two months worth of rain in just two hours. greek prime minister alexis tsipras will announce his new cabinet today along with a budget for 2016. pras has balanced creditors demand for cuts with his campaign against austerity. the ruling, coalition has been reelected. china has canceled flights to and from a paul, citing fuel shortages -- to it from nepal citing fuel shortages. cancellations after kathmandu airport said it had no fuel to offer.
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blocked border crossings in protest of the new constitution that they say denies that equal rights. transpacific partnership talks have been extended amid hopes that a deal could be agreed to. the japanese trade minister said in a court in principle could be announced today. however, significant hurdles remain. our next guest says this would provide a second wind to abenomics. he is from fujitsu research and joins us now from tokyo. you are saying that this is absolutely vital and crucial for japan. how vital is it? >> it is very important because , theally abenomics structural part of all the reform policies, are anchored around the tpp. opening up the markets, liberalizing markets from agriculture to pharmaceuticals.
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even if the negotiations struggle on, if there is a basic agreement, the government can link its policy to it and push things through. rishaad: it is not up to them. we have dairy as a bit of a stumbling block. we have other stumbling blocks as it comes to things like copyright, i suppose you could put it that way. has the deal really been cobbled together and we are just waiting for the t's to be crossed? martin: it really depends on what you want to see. so far, tpp has been dead quite a few times, and each time they are keeping on negotiating. this time, it looks better than before. what we would want to see is that we get a basic deal now, some final negotiation through the rest of the year, some signing ceremony early next year. it will still take time until all the governments have come together, but still we can go on
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moving into that direction, opening up markets. in japan, this is a very important case. rishaad: how long does it take? when this deal is signed, how does it resuscitate abenomics, if indeed abenomics needs resuscitation? martin: the government needs to improve. everyone is looking again at the bank of japan. this is so far the only reliable engine of growth so far. otherwise, reforms of the ground are more or less on hold, not much is happening. we will probably see a very similar cabinet lineup. the external anchors are even more important. hadaad: the last guest we was saying that the macroeconomic data looks weak but the microeconomic data is really good and he is saying
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that the facts don't fit the crime, as it were. martin: even the macro data shows that so far the economy is doing quite well. household spending is doing quite well. wheree a situation implementation is suffering quite a bit and what don't have is the top line cpi inflation data, the top line gdp growth data. we have inflation increasing, increasing prices, increasing demand. it is a bit of an expectation thing and also what is happening on the ground within corporations and households. rishaad: wages are going to be important here and there is wage inflation, but again, we do have
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that problem a bit translating into cpi growth. so far, households are not that happy anymore to see increasing consumer prices. wages are increasing very slowly. overall, the exporters are not doing so well because the entire environment in asia has become more tricky. doing well but now they are focusing on investment and profitability. as long ascome later households don't want to see much higher prices. the bank of japan here is that it is not pushing as hard as before to push prices anymore i guess. rishaad: good talking to you. we have to take a break, but coming up on "trending business, " painting a picture. the changing attitudes toward a practice that still carries a
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certain stigma. ♪
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rishaad: one in five americans now sports inc. on some part of their by -- now sports ink on some part of their body, but tattoos remain stigma in asia where links to the underworld remain. >> tattooing is part of japanese senseion, and so, in that , i was always interested as a kid. nowadays you have these conventions and whatnot, but back in the day it was very difficult to get information. there were hardly any magazines of tattoos 20 years ago, so i imported them from america and europe. that's how i started.
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the tattoo industry has changed tremendously over the past 20 years. i can't keep track. there is so much change. i biggest goal is to understand the history and culture of japanese tattooing and pass it on to the future. there is a huge gap. the perception of tattoos in japan and overseas is just so different. that is why i wanted to be a part of these conventions to show japan and people enjoy them. i'm sure there is a boom and bust in every country, but the tattoo industry is currently becoming more and more difficult in japan, and i want to change that. the type of customer usually depends on the style. i have many customers fly in from overseas. there are ceos, lawyers, and craftsmen, quite a range in the type of customers. my style is quite different from what we call yet cusa or dexter
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-- what we call yakuza or dexter style in japan. -- or dexter style. rishaad: coming up next, della -- for up next, developing economy. ♪ ♪
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rishaad: it is monday, the fifth of october. i am shot salamat -- i am reshot you're watching "trending business." singapore isive in our. -- this hour. stocks starting the week with a bang. biggest four-day gain since 2011. talking trade. the tpp negotiations are extended, all of it a hope that a deal can be reached.
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new zealand is said to be unhappy about its access to the american dairy market. culpa. mea the scandal may put the company's very survival into question. let us know what you think of our stories by following us on twitter. getting this breaking news from the world bank. looking at the slowdown in china and how that has prompted the economic outlook for east asia. verdict?he reporter: developing he staged will grow 6.5% this year, slower than the 6.7% projected before. it has got to do with china.
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cooling in probably 2015 and beyond according to the world bank. 6.9%orld bank estimating from 7.1 predicted in april as well. growth will probably decline further in the next few years. 6.7% and 6.5% respectively. that will put pressure on developing east asia, specifically commodity exporters. don't forget the trickle-down effect. fdi, tourism in the region will be hit as well. forget about more public spending, this go for that -- the scope for that to boost short-term growth is limited. east asia is susceptible to a greater degree of uncertainty. the world bank has cut its gdp forecast for the year for the likes of indonesia, the philippines, thailand. expect currency depreciation to follow. added risks for their currencies.
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timef this coming at a when the scope to ease policies needed to safeguard financial instability. thanks. we will have a detailed look at that world bank report later in the program. do tweet us your thoughts. let's see if there has been any reaction on the markets to those headlines coming out of the world bank. just see thedid hang seng index, office record its -- come up on off its record high a little bit. the fourth day in a row we have seen asian markets higher. by biglly really led
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gains in the oil and gas sectors, as well as the basic materials sector. the casinos in hong kong -- galaxy entertainment continuing its rapid rise. it is actually the best performer on the hang seng index. up by over 5%. retail stocks leading the way as well in hong kong. we can see here, only one stock out of the 50 is actually in the red. jakarta has come online and joined in that positive sentiment. the weekend u.s. jobs report on friday has given a boost to the region. we have seen the bloomberg stock -- the bloomberg dollar index fall. pickup toiven a good markets around the region. aren and australia -- we seeing some really good gains coming through from a lot of the mining players. seeing petroare
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the best performer on the regional benchmark index. that outlook from the world bank not fantastic but we do have china closed today. no reaction until thursday. once again, they are hoping they can strike a deal on the transit partnership. the 12 nations continue to huddle over the final details. devonte having a look at what is happening here. -- yvonne having a look at what is happening here. yvonne: they are said to be doing the finishing touches, but that press conference now delayed indefinitely, with no public comment as to why. dairy and drugs remain the big obstacles in this deal. the u.s. and australia may have
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come to terms on the u.s. -- come to terms on the intellectual property requirements for biologic drugs. they are at eight years, where information can't be released to make less costly generics. nations like peru, malaysia, and chile has said it is still too long. unclear, buttill there seems to be some kind of compromise that has been reached. long simmering discussions seem to make it harder to settle other issues. the last sticking point being dairy. the united states and new zealand at odds, with new zealand wanting greater access to the u.s. dairy market. the u.s. won't open its own market until they get more assurance that u.s. producers can sell more in mexico and canada. canada, where 90% of the dairy market is still closed to
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foreign products. still negotiating this morning on the largest trade agreement in history. rishaad: some of the other stories we are covering for you today. hong kong's richest man has agreed to buy portuguese windfarm developer in a deal worth as much as $324 billion. power asset holdings in the infrastructure holdings will each own half of the venture. it is owned by the spanish-portuguese venture capital firm magnum capital. li's companyt, says the venture allows them to expand their energy platforms globally. the vw chairman has warned that the admissions scandal could threaten the company's very existence. they took out ads in national newspapers pleading for trust.
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engineers have admitted installing cheating software in engines in 2008. bild also says vw manipulated software from continental and some diesel motors. -- at least0 motors 1100 vehicles were sent to be equipped with the cheating equipment. the psalm is not thought to include -- the sum is not thought to include provisions for legal fees or fines. former u.s. fed chairman ben bernanke has told usa today that some bankers deserve to go to jail for their role in the 2008 financial crisis. bernanke says individual actions should be looked at more thoroughly. bernanke is now promoting his new 600 page memoir "the courage to act." is set to be published today --
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it is set to be published today. rishaad: how short sellers are taking on hong kong's best-performing property stocks. coming up, fueling the anger. the constitutional rout in nepal. the latest news and views from mumbai. coming up next, more central bank decisions in the coming days. ♪
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rishaad: but that a look at those foreign exchanges. dollar yen right under the 120 level. , 70 u.s. cents or thereabouts. is there any chance of a rate hike this month or even this
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year after those disappointing payroll numbers from the u.s.? the executive director director and fx strategist from the bank of singapore. they can for joining us. before we get to what happens with interest rates in the u.s. and how it impacts this part of the world, just give a comment on the world bank report released at the top of the hour suggesting that volatility in china is likely to play out in east asia in a negative way. your views? >> i think that has been playing out already. we have seen responses to the and raterowth in china cuts in the region such as taiwan. , norway in response to the falling commodity prices. that is somewhat priced in the markets in terms of the fx.
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this will continue to keep us cautious over the emerging asian outlook over the medium term. look at the -- the chances of a hike by the fed have been pushed into 2016. this feedback loop where some of the liquidity that was just drained away perhaps feeds back. >> i think it depends on how the markets are fixated. i think the market wants to say that bad news is good news, in the sense of the fed delaying the rate hike into next year. u.s. growth, even though it has hit a rough patch, is likely to hold up well going forward. this will be positive and provide relief for asian currencies over the near-term. is that the ringot,
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likely to be one of the chief fisheries given a terrible year it has had? beneficiaries given the terrible year it has had? >> i think right now, there is some scope for relief but we are still cautious over the next few , relating to the slowing growth in china and what it means for commodity prices. rishaad: let's get to the interest rate decision that we have this week. i guess the biggest and most important one is the bank of england, in global terms at fedt, with them and the vying for the first central bank to lift the cost of borrowing. that the bankink the nextd will be central bank after the fed to hike interest rates.
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the market has somewhat pushed back the timing of the rate hike in your case to the fourth quarter of next year. that seems, to us, a bit too pessimistic. there is a risk. what is interesting about the bank of england in terms of how many people are likely to think in favor of a rate hike at this point in time, i think increasingly, more members are swinging in favor of rate hikes. rishaad: australian rates as well, that will be coming up tomorrow. rates.rd lows for aussie we had lynn stevens talking about, does a low cost of borrowing actually make any difference?
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>> the good news is that the rate cuts are starting to filter into the economy. we are seeing parts of the economy picking up. the retail sector, the housing markets. that provides some offset to the slowdown in the mining investments. given the slowing growth in china and what that means for commodity prices, there is still room to be cautious. will day passed this meeting given that rate cuts have been helping the economy. rishaad: again, let's look to friday. fed minutes should give us a notion of just how close it was for them to be doing something. >> i think the fed still wants to get it going by the end of this year, and that means that we still think that the best case is for the fed to raise rates by december.
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october looks unlikely right now given the soft payroll. soft payroll would raise the likelihood that the rate hike would be pushed into next year but we think the most likely timing is still december. rishaad: thank you very from the bank of singapore. >> checking some stories making headlines around the world. israeli prime minister benjamin netanyahu has vowed what he calls a harsh offensive in response to separate attacks that killed four israelis. to use the tension without trials more widely. israeli police have also restricted access for palestinians to jerusalem's old city. syrian president peshawar al-assad says the region will be destroyed if the russian air campaign in his country fails.
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the attacks have been criticized by the west, and in his first interview since the russian intervention, aside has conceded that his army has been defending regions more crucial to damascus. tona has canceled flights and from a paul citing fuel shortages. epal.o and from n kathmandu airport said it has no fuel to offer. nepalese citizens with ethnic ties to india have lost border crossings -- have blocked border crossings after the passage of a new constitution. rishaad: up next, english rugby fans will not be enjoying their monday morning back at . ♪
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rishaad: a hong kong trader obviously getting a much-needed shot in the arm for this golden week holiday. many mainland tourists are arriving and is significantly higher than previous years. >> the shot in the arm, meeting
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the amount of visitors coming in on the first three days of the golden week holiday. october 1, second, and third, up 15.4%. hadctober 3 alone, they hundred 50,000 mainland chinese visitors to macau. hong kong had just 174,000. hong kong tends to be a bigger draw for tourists but mccallie seemed bigger numbers. this is much-needed because september gaming revenue was down 33%, the 16 consecutive month of decline for revenue. why are we getting this bump in the casino stocks? u.s., was up on friday. they are saying that the central government is possibly going to step in with some support measures for macau since you
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have had a year and a half of slumping revenue at the table. rishaad: just come back from thailand, what is it like on the ground? >> the hope is that the golden week holiday would see a big boost the chinese tourists. we have already seen the number of chinese tourists coming to thailand nearly double from the 2012 numbers to more than 6 million expected this year. again, you had that bangkok bombing a couple of months ago, a slowing economy, so is --, so there is uncertainty. these are only anecdotal numbers. i spoke to a fund manager at richmond asset management. this is what he had to say. >> quite a soft period this year. the tourists that are here are chinese, but not in the numbers you would expect. a big concernre
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themselves about their own economy. >> as he alluded to, that being said, most of the tourists i saw were mainland chinese. a lot of mandarin being spoken in thailand right now. less russian. rishaad: we're going to take a look at what is going on in the philippines. razon staying upbeat despite two quarters of losses at his blueberry resort -- is bloombury resort. money. months you make the big picture should start narrowing in the next few quarters. has been industry painted with the same brush. we are nowhere near the situation in macau. rishaad: billionaire philippine
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enrique razon speaking exclusively to bloomberg. like it or love it, it was a big weekend in the rugby world cup. headlines dominated by england's dismal failure at their own tournament. they go out after defeat by australia. south africa kept things on track with a winner over scotland and japan beat samoa. a stepay, argentina took toward the quarterfinals over tonga. england becomes the first host to fall out of the world cup in the group stages. they are also the first world cup winner to fail to make it out of the group stages. had an overwhelming victory.
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australia now face wales to determine which nation will top group a. ♪ before we head into a break, let's talk movies. martian"ury fox's "the top u.s. box office is this weekend. biggest domestic debut of the year. the matt damon film raked in $55 million. it is expected to double that in weekend ticket sales globally. talentsis a man of many , and may have a future in art. his collaboration with a chinese are dispatched 5.4 -- a chinese atist fast $5.4 million somebody's here in hong kong -- at sotheby's here in hong kong.
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the proceeds are going to charity to promote environmental awareness. -- a quick look at what is going on market wise. injury and singapore, a look to the upside. nothing in china, golden week. let's quickly look at what is going on in manila. there we go, heading in the opposite direction. i do beg your pardon. clearly, we are in the green there. psei up by half of 1%. up next, the slowdown in china hitting its neighbors hard. world bank growth forecast. ♪
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rishaad: a look at our top stories. slowing trade topping commodities. all about according to the world bank latest report. china's actions contribute into volatility globally. disappointing u.s. jobs numbers, asian markets launching a new week with a bang. although this on the prospect of weak economic data pushing back a fed rate rise until next year.
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talks extending discussions in hopes that a deal can be reached. -- do new zealand is unhappy about its access to the american market. , it has had an hour of trading thus far. the longest rallies we have been reporting for three months. what is driving sentiment as we head into the japanese lunch break? >> we have had a very strong rally, the longest rally in three months, and the biggest rally we have seen on the regional benchmark in four years . we did have the world bank cutting vat outlook -- cutting the outlook for china.
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markets remain closed in china until thursday. we will take a look at some of the stocks driving that in a moment. byarta very strong today, up 2%. korea, australia, and japan looking very strong. japan going into the lunch break. the nikkei up by 1.25%. hong kong, there has been a lot of emphasis on the casino stocks. stocks that were listed in new york as well rising significantly on friday. galaxy entertainment up by another 5%. looking verylso strong. saw in a fall that we retail sales trade in hong kong,
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down 5.4% on the year in august. looking at some of the major the best performer up by over 10%. australia's new crest mining getting a solid rise today. bhp billiton also having a solid session, up 3.5%. it does not appear to be having too much of an impact on markets today. growth in china, that is what is weighing on these east asian economies. has, is it that gloomy? haslinda: it is not. the world bank estimating developing east asia will grow 6.5%.
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it grew 6.8% last year. china, the reason for the slowdown, china poised for a slow down over the next three years. byrojected 6.9% followed 2016 and6.5% gdp for 2017 respectively. that will continue to put pressure on developing east asia, especially if you are a commodities exporter. we are talking about tourism in the region likely to be impacted as well. if you think that more public spending can help compensate, not really, according to the world bank. east asia, as you can imagine, is susceptible to this greater degree of uncertainty, the likes of indonesia, philippines, thailand. the growth forecast cut by the world bank as well.
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these economies can expect the currencies to fall, the ringgit and the rupiah have been smacked already, among the worst currencies in asia this year. moderate growth, when you compare it to the rest of the world, east asia does remain a main growth driver in the world economy. rishaad: is china expected to be bustle at the risks and the slowdown? haslinda: china has enough policy buffers to address the risks. that is what the world bank is saying, but it also says that it would erode these buffers over time. if china's slowdown is worse than expected, you can expect the rest of the region to feel it as well. capital outflows, greater volatility, and with
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expectations of the u.s. rate hike, the world bank says the risk markets may overreact in the short-term, even though everything has long been anticipated. rishaad: thank you. at more ona look china. answers, -- tim has the answers, well, nearly all of them. where are we headed? how do things stand in comparison? tim: one of these points in time after this crazy volatile third quarter, we look at the last three months of the year, to take a step back. it is interesting looking at china on a forward multiple, we have gone from almost 20 times, this is the shanghai composite,
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back to about 11.7 times. this is similar to its long run average, which you can see. if you compare this to other asian markets, we have gone from one of the highest multiples to now back to one of the lower multiples. hong kong is the only thing that is cheaper from an asian major market. a lot of that is china related anyway. the valuations come back to a more reasonable level on a basic perspective. rishaad: what about other measures? tim: if you think about a couple of aspects, we have large caps that are underperforming, even though they are state-supported. valuations on those stocks are significantly lower than the valuation on the smaller caps. you can see that with this
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graphic, we have separated out the china market. 10% increments from largest to smallest. you can see the performance in july when the state stepped in with support mechanisms and you can see the forward multiple. this is making that point, 13 times forward versus 33 times forward earnings. it is fascinating. many sectors are trading with those larger cap stocks. quite interesting. rishaad: what about other approaches to devaluation? tim: it is important to look at that you multiple in the context of the underlying growth expectations. there is a lot of speculation about china's growth and earnings, the multiple on an earnings adjusted basis is world. lower than
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the other is to put the market in context to gdp. the market cap relative to gdp and we have gone from having spiked up significantly to back to a very average level. if you compare this measure versus world and u.s., china is back to a much lower level. it is easy to say china is expensive, take a step back and look at various measures. a pullback of 40%, it has brought valuation back to more reasonable levels. rishaad: thank you very much. tim craighead. taking a look at the valuations on chinese stocks.
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saudi arabia and other opec members have raised production, trying to maintain market share. this has caused brent crude to tumble about 50%. aramco has erased prices for northwest europe. britain biggest insurance -- britain's biggest insurance downplaying reports that it might you -- it might move to asia. it is only a fifth of its operations would be affected. solvency rules coming into beefing upanuary, capital reserves. delta has reignited its row over american.
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delta called on u.s. regulators to hand it back because american has failed to file schedules or offer tickets. u.s. carriers only have four slots in the airport. next, standing for gender equality. the program exclusively for women to help the imbalance. "trending business" returns in a minute. ♪
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rishaad: the thick haze showing parts of southeast asia and showing no signs of letting up. schools will be closed for at least two days this week. air quality has been deemed
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"very unhealthy." how bad are things there? >> as you noted, schools across malaysia are closed. 4 million students to be expected over two days. three states remain on standby. to data, intensification of forest fires over indonesia could see this haze be the worst on record. six districts around kuala lumpur tipped into the unhealthy range. three airports were closed early on sunday. they were reopened eventually. because of limited visibility conditions. we have not hit the levels we saw in 2013.
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all departments involved in this are certainly on alert. rishaad: what is the government doing to fix the problem? can i do anything? sophie: just recently, the prime minister said it is up to indonesia to collect evidence and enforce measures. last week, there was a meeting held between ministers were indonesian officials said they were promised stricter enforcement. we have seen singapore highlight some companies who may be contributing to the haze. in malaysia, we do not have a transboundary haze law. this act is still in the proposal stage. rishaad: thank you. going to have a look at some stories making headlines.
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leastsh floods killed at 16 people and left another three missing in the south of france. real service remains shut -- rail service remain shut on most of the riviera. 20 centimeters of rain on saturday night, 27,000 homes without electricity. greek prime minister alexis tsipras will announce his new cabinet today along with a budget for 2016. parliament begins a three-day debate which will end with a vote of confidence. exit polls say portugal's ruling coalition have been reelected. kia have refused to join a campaign by fifa calling
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for the president's immediate exit. cokeiser, mcdonald's, and demanded his removal on friday. adidas called for reform without mentioning blatter. anis disquiet in the face of investigation. rishaad: a recent study showing companies with at least one female executive outperformed those with all-male teams. the pace with which women move up the ladder remains painfully slow. it will take 100 years to reach gender equality at this rate. nick, thank you for coming in. how bad is it? i was looking at some of the stats. japan, 3% of board members are women. in korea, even less.
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comparison,ong, i is 11.1% -- by comparison, is 11.1%. rishaad: why? that is what you have to address. nick: there is a global problem. boards do not see this as a problem. in hong kong, it is much more prevalent and so you have got to deal with the primary issue of getting boards to recognize gender diversity, board diversity, it is something they need to address. how do we do that? when he to get boards to use -- we need to get boards to use external sources to helpful point new directors -- to help them appoint new directors. i think women need to become
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more visible. business case, as i mentioned, to have women on your board. studiesey have all done for the past 10 years. each study reinforces the previous one, companies make better returns, long-term suspect -- success for their shareholders. when you have boards made up of only one gender or only one group of people, groupthink becomes a problem. tension.ed a degree of atbe that is an issue volkswagen, for example. you need to have a degree of tension on the board. in ninenly have one
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women on boards, you do not have enough diversity. you do not have enough individuals challenging the status quo. if you have lots of women serving on boards -- but they are not getting to boards. it is also the plan under the board. there is a ceiling underneath the ceiling. women have children, they do not return to the workplace. we have to find ways to get more women to return. rishaad: getting back to japan, abe seesthe problem -- the problem. a have this whole issue with an
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aging population. nick: they passed a law that says all companies in japan have to declare their gender balance. if they lie, there will be a penalty. if they go from zero to zero, there is no penalty for that either. it is quite a soft law. the point is to raise an awareness. the more companies boards have to report items, suddenly, they start to bring the item into their boardroom conversation. are we doing better than toshiba? and so on. what we saw in the u.k. with the 30% club, they used to pressure to increase the number of women 25%.ards from 11% to
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it all started with her pressure. abe is doing the same thing, using pure pressure to raise the interest -- here pressure --peer pressure to raise the interest level. rishaad: we will have to take a break. india is dismissing claims it is imposing an embargo. we will have the latest from mumbai, coming up. ♪
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rishaad: nepal has been struggling with a shortage of fuel and other necessities as supply trucks are stranded on the indian side of the border. what is going on?
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this has been -- the constitution was changed a short while back making political parties in nepal united. the top mainstream parties have come together like never before. what has put pressure on the relationship is allegations of resulted inthat has a shortage of essential goods. some resolution coming in yesterday, 100 trucks with goods entering nepal. several freight trucks, fuel trucks which have been stranded on the indian side for over 11 days. bilateral trade between the two
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$4.21stands at about billion. what is crucial is india has been a key ally in terms of maintaining peace. this is a thorn in the side of bilateral relations and the pals political parties -- nepal's political parties have been uniting. rishaad: thank you for that. let's take a quick look at the markets. holiday continuing in china. we have the hang seng up 2%. the nikkei up 1.2%. looking at sydney and wellington , bucking the trend.
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stay tuned, it is "asia edge" coming up. ♪ ♪
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rishaad: middle of the asian trading day. it is the middle of the session and this is "asia edge." look at our top stories. positive thinking, hong kong leading asia higher. extended inions are the hope of a deal, but significant obstacles remain. china's slow down prompting the world bank to lower its forecast
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on east asia as a driver of growth. angie: the good times are rolling again in macau for now. casino stocks are surging after chinese visitors returned intros. -- in droves. warns itming chairman might be fundamental to the carmakers survival. air quality worsens again around kuala lumpur. the worst on record. all that and more in this edition of "asia edge car." asian stocks higher for a fourth session, the longest winning streak we have seen in three months. the weaker than expected u.s. jobs report will delay a rate hike.


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